It�s as well your surveyor found this issue now, because it makes it your seller's problem, rather than yours once you've acquired the property. Whilst understanding your desire not to lose a dream house, don't be blinded by what are serious deficiencies in the way this extension was done.
As I guess you know, Planning Permission and Building Regs are two different issues and it sounds like the current owner pulled the wool over Building Control regarding the loft conversion. Without Building Regulations approval for this conversion, this cottage can only be described as having non-habitable space in the loft, which means it can't be counted as a bedroom. This is why the surveyor is (correctly) valuing it lower. Building Regs are there for a purpose - to set minimum standards of construction etc.
Regarding loft conversions, the main issues are thermal insulation, whether the joists are appropriate for the extra loads of a habitable room up there, and (most critically in my opinion) whether the cottage meets fire regulations. Regarding this third one, if the floor levels of the loft conversion are more than 4m above the ground level outside, the construction must be such that 1) there is an opening window of sufficient size and position such that a person could escape through in the event of fire 2) all the doors adjoining the route from this loft to the ground floor (i.e. landing and hall) MUST be fire doors 3) 30mins fire protection must be provided between the rooms on the first floor and the loft space - the usual way to do this is by 2 layers of plasterboard on the ceiling, not one.
Now, you say this is a cottage - that may mean the ceilings are lower and the loft may be less than 4m from the ground. I suggest you go back to them and say �show me how this cottage meets fire regs�.